ABSTRACT
Today’s crowdfunding ecosystem consists of many types of crowdfunding (contribution, reward, loan and equity). At the same time, because crowdsourcing comes in various forms, it appeals to a wide range of entrepreneurial and innovative ideas. When a business owner is unable to raise cash from traditional means, he or she can choose the form of crowdfunding that is best appropriate for their project. There are models in recent literature that bring crowdfunding within the context of financing businesses throughout their life cycle stages. We highlight the difficulties of incorporating crowdfunding into the aforementioned models as a result of its investor- and business-specific characteristics. Although it is not surprising that crowdfunding is employed in the early stages of a company’s development, its distinctive qualities make it difficult to design a model of financing enterprises that includes both traditional financing methods and crowdfunding. When it comes to financing their projects, entrepreneurs have varied incentives and, as a result, exhibit diverse behaviours.
